Oil prices are up across the board on big volume on NYMEX.
Oil tops $81, a jump in pump prices could follow
Oil prices top $81 a barrel on manufacturing data, stock market rallies
Sandy Shore, AP Business Writer, On Monday August 2, 2010, 11:44 am EDT
Oil prices topped $81 a barrel Monday on positive economic news and rallying stock markets. The increase could translate into higher pump prices in the weeks ahead.
The national average for a gallon of regular unleaded gasoline was $2.735 Monday, according to AAA, Wright Express and Oil Price Information Service. It's about 0.8 cent less than it was a month ago and about 19.7 cents more than a year ago.
Benchmark crude for September delivery rose about 3 percent in after positive reports on manufacturing in both the U.S. and Europe. A report in the U.S. concluded the manufacturing sector grew in July for the 15th straight month.
The reports indicated the global economy is continuing to recover, which gave oil traders more encouragement that consumers would begin to spend more money, analysts said.
If oil prices remain above $80 a barrel, that could mean higher prices at the pump unless demand falls away with the end of the summer, said Rich Ilczyszyn, a senior market analyst for Lind-Waldock. Summer typically brings the heaviest demand for gasoline as vacation travelers join commuters on the roads.
Another factor that could affect pump prices is the threat of a hurricane shutting in production in the Gulf of Mexico. The most active period of the season runs from Aug. 15 to Sept. 15.
"Every hurricane or possible hurricane will send the prices up a few pennies and then dip back down assuming nothing major happens," said Michael Lynch, president of Strategic Energy & Economic Research.
In the U.S., the Institute for Supply Management said Monday its manufacturing index slipped to 55.5 in July from 56.2 in June but a reading above 50 indicates growth. Measures of production and new orders grew more slowly but more manufacturers said they planned to add employees.
In addition, a manufacturing report for the 16 countries that use the euro was revised higher for July and showed that the continent's economy continues to recover faster than expected.
Stock markets rallied on the news. Oil traders have been monitoring the markets for hints about consumer confidence. The Dow Jones industrial average rose almost 2 percent.
Another factor that helped oil and other energy prices was a weaker dollar. Since commodities are priced in dollars, a weaker dollar makes them more attractive to overseas buyers.
Benchmark crude for September delivery rose $2.53, or 3.2 percent, to $81.48 a barrel in early trading on the New York Mercantile Exchange.
In other Nymex trading in September contracts, heating oil rose 6.95 cents to $2.1576 a gallon, gasoline added 6.2 cents to $2.1844 a gallon while natural gas fell 17.2 cents to 4.751 per 1,000 cubic feet.
In London, Brent crude was up $2.36 to $80.54 a barrel on the ICE Futures exchange.
Associated Press writers Pablo Gorondi and Alex Kennedy in Singapore contributed to this report.
Oil Price
Re: Oil Price
You should all take the time to read the article above. Thanks for posting it.
I want to own companies like Gulfport (GPOR) and TransGlobe (TGA). These are small-caps that have the potential (in their current inventory) to add a lot of oil reserves (relative to their size) during the next three to five years. All of you should take a hard look at what Gulfport has up in Canada. Their Grizzly oil sands acreage position has HUGE upside and at today's share price you are getting that upside for nothing. TGA will be drilling exploration wells during the next 18 months that could add 100 million bbls of new oil reserves.
Another one is PetroBank. As oil gets a lot more expensive their THAI process will become extremely valuable. Plus, PetroBank is ramping up current production right now.
I want to own companies like Gulfport (GPOR) and TransGlobe (TGA). These are small-caps that have the potential (in their current inventory) to add a lot of oil reserves (relative to their size) during the next three to five years. All of you should take a hard look at what Gulfport has up in Canada. Their Grizzly oil sands acreage position has HUGE upside and at today's share price you are getting that upside for nothing. TGA will be drilling exploration wells during the next 18 months that could add 100 million bbls of new oil reserves.
Another one is PetroBank. As oil gets a lot more expensive their THAI process will become extremely valuable. Plus, PetroBank is ramping up current production right now.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group